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To identify the effect of change of scope on time overruns in construction projects in developing
countries
To establish the effect of procurement process on time overruns in construction projects in
developing countries
Research questions
What is the effect of delayed payment on time overruns in construction in development countries
What is the effect of financial constraints on time overruns in construction in development
countries
What is the effect of change of design on time overruns in construction in development countries
What is the effect of procurement process on time overruns in construction in development
countries
Importance of the study
Construction industry plays a vital role in economic growth of any given country. Most developing
countries are undertaking several infrastructural projects in order to enhance economic
development. This has seen several construction projects come up in building houses, roads, water
infrastructure, power generation and other areas. These development projects have faced several
challenges among them timely completion within budget. There seems to be agreement between
parties in construction that time overrun in a key concern. The time overrun can be attributed to
the stakeholders in the industry who either directly or indirectly through other factors. By the
owners of the projects failing to make timely payment to contractors they in turn delay to procure
required material and services in time. The owner or his consultant can change the scope of the
project, this will eventually lead to delay in completion of the project. This study seeks to
investigate these causes of delay among others in construction projects in developing countries.
Identification of the causes for time overruns forms the basis for development of control measures
to ensure they are controlled during initial stages of the project as a result mitigate the side effects.
Limitation of the study
The goal of this study was to establish causes of time overruns in construction projects in
developing countries. It mainly focuses on the causes of the time overruns in developing countries
in Africa and Asia. It will mention in passing some of the consequences of this causes on the
clients, contractors, consultants and end users.
Time overruns
Time overrun can be defined as non-completion of projects within stipulated time. One of the most
common challenges faced by both private and public developers in completion of projects within
scheduled time and budget. Time overrun in construction projects is one of the causes of negative
effects to the stakeholders. This situation has made several researchers to undertake studies
globally on this subject (Rathnaamali, 2013). Time overrun is commonly associated with
construction industry. This situation is more severe in developing countries where time and cost
overruns in some cases exceed 100%of the budget. In general construction projects take two
phases; the preconstruction and the construction phase. The construction phase takes most of the
time overrun in the entire project. Time overrun has adverse effects on the success of the project
with respect to cost, quality and safety. The effects extends to the material suppliers in terms of
change in cost of the materials. Studies have been undertaken by environmentally conscious
researchers in relation to the effects of construction projects to the environment. Researchers have
developed models to emphasis the effect of overruns on every angle of the construction project
(Sweis, 2013).
Many studies undertaken in different areas have highlighted different causes of project time and
cost overrun. Most have showed that the problem is caused by financing and payment for the
completed works (Ameh, 2011). Chelabi el al (1984) found out that time and cost overruns occur
mainly in the initial stages of project development that entails planning. The responsibility for the
time overrun may be due to the owner of the project when s/he fails to submit required data in
time, fails to approve and sign contracts and allowing access to the site (Ameh et al 2011). The
contractors to have responsibility on time overruns. They are responsible for labour productivity,
work scheduling, construction mistakes and equipment malfunction among others.
While we allocate the various causes of time overrun to the stakeholders in the construction
industry, there are instances where overrun occur as a result of forces majeure; instances of
weather, civil and industrial unrest (Ameh et al 2011).
Delayed payment
Delay can be regarded as the most common, complex, costly and risky challenge experienced in
construction projects. Delays in construction can be caused by several factors including difference
in plan interpretation, change of orders, site conditions and scope of works among others (AlGhafly et al. 1999). Delayed payment is a common challenge in construction projects and should
be recognized as a major problem since it keeps recurring from project to project. Payment is
required for purchase of material, labour, pay subcontractors and other general overheads. Delayed
payment lead to cash flow problems in the project which in turn lead to negative cash flow. In
general late payment affects time, cost and quality since all this items depend on prompt payment
(Ye et al 2010). Some practitioners in the industry tend to think that delays in payment is normal.
This perception has worsened the problem and made it difficult to deal with and can be disastrous.
Clients tend to reduce financing costs by delaying the payment. This puts pressure on contractors
who may not have the required capital and access to credit to cover all the payments. Davis (1999)
postulated that adage of strategic cash flow is to collect early and pay late. This has proved to be
counterproductive in which clients holdback on their money while contractors wish to obtain their
money as soon as possible. This makes late payment a challenge that is difficult to deal with due
to the different interests of the stakeholders (Ye et al 2010).
Cash flow problems in constructions projects is closely related to delayed payments. Construction
projects are generally long lasting and cash flow is critical. Any deviation as a result of cash flow
delays can have a major impact on the project. Delayed payment from owner of the project affects
the cash flow of the contractor and when the owner withholds the payment, it creates cash flow
problems to the contractor. Delayed payments starves stakeholders in the supply chain of the
money who in turn resort to borrowing which will end up making the cost high due to the interests
(Ye et al 2010). Delayed payment can be a result of the project owners financial problems which
affects the progress of the project resulting in change of wok schedule and specification, thus
affecting the quality of the project (Memon et al. 2014).
Financial constraints
Like any other endeavor, projects have limited resources that are to be utilized in their execution.
Finance is one such key resource required to ensure timely delivery. Financial constraints will have
direct impact on the success of construction projects. Financial challenges of the owner of the
project, contractor and the external market have negative impact on the project.
Stakeholder
Types
changes
of Impacts
Actions
Specification
Owner
Change
process
specification
design
documents
brief
Design
Consultant
before bidding
Incomplete
Reward
of Better control of
and design versions,
change,
in construction; investigation;
omissions
of change orders
conditions
consider
buildability
in
design
Construction
Contractor
As-builts
quality in design
operational
control;
defect;
coordinated
unanticipated
documented
site
documents
conditions;
and
value
drawings; daily
engineering;
logs
materials
or
equipment
not
available;
inclement
weather
Table 1: summary of construction changes (Hao et al. 2008)
From the summary table 1 above, it can be observed that the main cause of change in construction
project is the owner and the designers errors. The impact of change of scope in construction
projects should be evaluated on case by case basis in order to assist in decision making process.
Properly managed change brings benefits to the owner of the project otherwise it will bring
negative impacts that may lead to time and cost overruns. In general change in scope can be due
to the following.
Change in scope by the owner
Change of specification in construction project is a common occurrence especially those with
inadequate objectives. When these changes in the projects are carried out, they lead to variation in
the schedule and sometimes costs (Memon et al. 2014)
Change of design by the consultant
Consultants always seek to improve on their designs in order to satisfy their clients as a result they
may initiate a change in scope by changing the design in order to satisfy or please their client. This
is however common where projects are initiated before the design is finalized. The extent of the
effect of this change depend at the stage at which it is initiated (Memon et al. 2014).
Change in scope
Consultants can initiate change in scope in order to satisfy their clients. This is a frequent
occurrence and often led to time overruns (Memon et al. 2014).
Procurement process
Construction projects involve substantial financial and human resources for and during execution.
Procurement of construction material and or services has not fallen short of issues ranging from
inflated prices to substandard material. Governments and developers around the world are always
working towards improving the procurement processes. The procurement process range from
tendering, single sourcing, quotations among others. One of the most common procurement
method used in construction is tender award to the lowest bidder.
Award of tender to the lowest bidder
In most developing countries, procurement of construction material is generally based on the
lowest bid award system (Khan et al. 2015). Most governnments put this system in place to ensure
lower cost of completing projects. The system has generally been accepted because it doe not only
ensure low cost of construction but also reduces chances of fraud (Irtished, 1993). Although this
system has been in place for many years with legal backing and has ensured competitiveness, some
developers hav voiced concerns that it over rellies on cost and does not factor quality aspect of the
project. This makes it less likely that the contract will be awarded to a contractor who has the
capacity to perform and deliver the highest quality. This therefore implies that the lowest bid
system may not result in the best value for money. The system exposes the developer to a lot of
claims from the contractor on design and execution (Khan et al. 2015).
Awarding tender to the lowest bidder has several challenges such as time overruns, cost overruns,
quality compromise and adverse relationship among stakeholders (Thomas, 2009). This system
encourages less qualified bidders to participate in the bidding process and discourages more
qualified ones.
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